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Category Archives: John Lothian Newsletter

The John Lothian Newsletter provides news and commentary about the global exchange traded derivatives, securities, environmental and related OTC markets. The daily email intelligence briefing and companion blog are edited by and .

John Lothian Newsletter: Investors skirt new shorting curbs to bet on EU woes; Regulators to fortify bank capital after Libor, fines and fraud; Barclays case shocks the energy market Standard

Investors, told to stop speculating on EU government bond defaults, promptly begin the search for a different investment vehicle that will allow them to continue trading the same outcome. Bank regulators are increasing capital requirements after ongoing fraud and poor decision making shows no signs of subsiding. Barclays sets aside more money to pay fines for allegedly having “done an Enron” to the US power market. Take a look at First Read and the Exchanges section for a rundown of October exchange volume numbers; the first wave of reports suggests a continuation of the familiar pattern of, “Overall pretty lousy;…

John Lothian Newsletter: LSE gets French OK on LCH deal; CFTC handling of swaps rules a `train wreck,’ commissioner says; ICAP rebrands Plus exchange business Standard

The London Stock Exchange receives a thumbs-up from French regulators on its plan to take control of clearinghouse LCH.Clearnet. CFTC commissioner Scott O’Malia reports being less than impressed with the way the agency set forth and then reeled back rules to govern energy derivatives. Global broker ICAP pulls the cover off of ISDX, its new rendition of the small-cap-focused Plus exchange that it purchased earlier in 2012. In First Read today, take a look at the new interview with Todd Fulton of Pioneer Futures, who talks about the managed futures space, and what investors want from an emerging manager.

John Lothian Newsletter: After Hurricane Sandy, Stock Exchanges Prepare to Open; Russia works on financial hub ambitions; A Year Later, All Eyes Still on ‘Edie’ Standard

Wet and bruised but unbroken in the hurricane’s wake, the USA’s east coast and its financial centers prepare to clean up and return to normal operation. Moscow’s financial markets, the recipient of both fascinated appraisal and ridicule from the outside, is gradually making progress on becoming a legitimate center for trade. Last year’s house of horrors MF Global is still haunting investors, and little progress has been made on finding the people responsible for moving around the money, much less the stuffed zombies.

John Lothian Newsletter: Brokers Fretted Over NYSE Backup Plan For Hurricane; Blizzard of regulation has its effect; First Libor damages trial set to proceed Standard

Open-With-Hurricane plans from the NYSE and other exchanges are made and then pulled back as financial closures extend into Tuesday; much analysis ensues. The Financial Times investigates the far-reaching consequences of a new and heavy regulatory burden at financial companies. In the UK, a LIBOR liability trial is cleared and ready for takeoff. In First Read today, be sure to check out the new interview with Justin Bouchard about the better side of algorithmic trading.

John Lothian Newsletter: TOM gears up for a bigger slice of Liffe; SEC Weighs Bringing Back Fractions in Stock Prices; NYSE Euronext to Shutter Carbon-Trading Exchange in Europe Standard

Netherlands-based trading platform The Order Machine has its sights set on competing against a popular NYSE Liffe index option contract. More than a decade after decimalization, the SEC is reconsidering that decision and is contemplating a return to quarters and eighths for some products. NYSE Euronext plans to turn out the lights on its Paris-based BlueNext carbon exchange, as volumes dwindle in that marketplace.

John Lothian Newsletter: Credit Suisse Seeks to Run Exchange; Nine more banks added to Libor probe; Private investors optimistic for economic recovery Standard

Credit Suisse angles to convert one of its trading platforms into an exchange, in a bid to create the first US exchange owned entirely by a bank. The LIBOR investigation isn’t going away; it’s getting bigger, as nine more banks are added to the list of companies suspected of manipulating the now-disgraced benchmark rate. On a positive note, a recent investor survey reveals that a significant majority of those polled are expecting better times to arrive within the next year. In First Read today, Jim Kharouf revisits the ever-on-dragging Hehmeyer vs. Alaron dispute, and notes that it appears to have…

John Lothian Newsletter: US futures trading to rebound after OTC shift; CME Europe exchange to target Asia-Pacific market; CFTC’s Gensler says still reviewing cross-border Dodd-Frank input Standard

US futures markets may be able to use regulatory clarity as a springboard to improved volume next year. CME Group’s plans for its new London exchange include targeting Asian traders, as its operating hours will cover Asia as well as Europe. The CFTC’s Gary Gensler says the agency is still considering comments and consulting with other regulators on how to implement Dodd-Frank rules across international borders. Inside today’s First Read, check out John Lothian’s new plan to use FIA EXPO to revitalize the global financial marketplace. Yeah, well, you’d better go read it, then.

John Lothian Newsletter: Exchanges Retreat on Trading Tools; Tradeweb launches ETF platform; NYSE chief laments complex markets Standard

Fund managers and regulators are displeased with US exchanges over certain order types that they say creates an unfair disadvantage for their clients. Platform operator Tradeweb launches a new service that provides multiple price quotes for ETF products to traders. NYSE Euronext chief Duncan Niederauer wants a complete review and overhaul of the structure of US financial markets, believing that the system as a whole has become too complex to serve its essential functions.

John Lothian Newsletter: UK report urges rules to limit HFT risks; CME Challenger Struggles In Largest U.S. Derivatives Market; SEC adopts new risk mgmt rules for clearing agencies Standard

A UK report, two years in the making, makes several recommendations on how to best limit the risks involved with high-frequency trading systems. The ELX exchange, launched in 2009 to compete against CME Group, is struggling with evaporating volumes as customers walk away from core interest rate products. The SEC adopts rules to regulate risk management practices at clearing companies.